Singapore is one of the simplest jurisdictions in terms of human resources (HR) and payroll in Asia Pacific, a stark contrast to major Asian economies like China and India which are found to be among the most complex globally, a new report by TMF Group reveals.
The study covers 77 jurisdictions by the complexity of HR and payroll, exploring the theme of employer and employee relations across four areas — hiring and terminating employees; the ongoing management of HR and payroll; the relationship between international workforces and local rules; and technology as an enabler for both employers and employees.
Trailing behind New Zealand, Singapore is found to be one of Asia Pacific’s least complex markets and is tied on the same ranking as Thailand.
By contrast, Malaysia, China, India and Indonesia were seen as the most complex for multinational companies when it comes to HR and payroll practices and legislations.
For businesses, complexity in this area is ultimately about a jurisdiction’s approach to the relationship between employer, employee and government. COVID-19 has added a further level of complexity to the debate, as governments have responded differently to workers’ needs throughout the crisis.
In Singapore, more than 140,000 employers have received payouts under the government’s Jobs Support Scheme. Totalling over S$21.5 billion, the payments will help subsidise the wages of more than 1.9 million local employees.
“Companies that were taking care of their employees before the pandemic have been the most likely to continue to have a good relationship throughout,” said Edmund Lee, TMF Group’s managing director for Singapore and Malaysia.
“It will be interesting to see whether HR and payroll legislation will shift to offer a safer, more protective working environment for employees – while still attracting foreign businesses in order to regrow their economies,” said Lee.
At the other end of the scale, Malaysia’s complexity is primarily attributable to the large number of Public Rulings under the Malaysia Inland Revenue Board, adding a layer of complexity around guidance and interpretation of tax laws in respect of salaries, benefits in kind and their tax deductibility.